Saturday, 12 September 2015

The U.S. Presidential Race and Pharmaceutical Pricing (and More)

The U.S. Presidential Race is pressing ahead.I’ve written a bit about Donald Trump and the
value of his name, here.Trump has
continued to receive a mixed response to his ideas about immigration and has
come under increased fire from his party.Notably, (mostly) conservative commentator Charles Krauthammer recently
confounded conservative talk-show host Bill O’Reilly of Fox News by making the
case that Trump’s “rounding people up for deportation and possible
reimportation” was not only illegal, but morally wrong (and prohibitively expensive).Krauthammer pointed to the heart-breaking
Elian Gonzalez episode.

The number two democratic candidate, Senator Bernie Sanders
has introduced a bill in Congress designed to lower the cost of
pharmaceuticals (press release).The fact sheet is
here.While the bill apparently allows
the negotiation of drug prices under the Medicare Part D prescription drug
program, it also allows prescription drug importation from Canada.Notably, “The bill also directs the United
States Trade Representative to reject provisions in the negotiation of any
trade agreement that would raise drug prices in the U.S., extend periods of
patent exclusivity, or remove flexibilities in U.S. law regarding drug pricing.”Additionally, the bill:

would prohibit anti-competitive arrangements between brand
and generic drug makers where the brand name drug manufacturers pays the
generic manufacturer to delay bringing their generic alternative to market.
According to the FTC, these anticompetitive deals cost consumers and taxpayers
at least $3.5 billion in higher drug costs every year. In FY 2012, the FTC
found that there were 40 potential pay-for-delay deals involving 31 branded
products with combined U.S. sales of $8.3 billion.

Finally, the bill also would terminate any market
exclusivity if fraud is demonstrated, which would include “off-label promotion,
kickbacks, anti-monopoly practices, and Medicare fraud.”Interestingly, the bill further requires:

pharmaceutical companies to publicly report
information that affects drug pricing, including the total costs incurred for
research and development and clinical trials, as well as the portion of drug
development expenses offset by tax credits or paid by federal grants.

The legislation also requires drug companies to report not
only the price information charged to federal payers, but also requires
companies to submit prices, profits, and sale information in other countries in
which those products are sold.

The additional information will
likely set the stage for more criticism about the current system. More information about the subsidization of
federal research through the Bayh-Dole Act for prescription drugs, particularly
biologics, will be interesting.The bill
in its entirety can be found, here.

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